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Heathrow Workers Seek Improved Pay Offer in BAA Talks

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Aircraft Sit On The Runway At Heathrow Airport
BAA, a unit of Spanish builder Ferrovial SA, will commence negotiations with Unite at midday at the headquarters of the Advisory, Conciliation and Arbitration Service.Photographer: Simon Dawson/Bloomberg

Aug. 16 (Bloomberg) -- Workers at London Heathrow and five other U.K. airports are seeking a new pay offer from BAA Ltd. in negotiations today, Unite union leader Tony Woodley said.

BAA, a unit of Spanish builder Ferrovial SA, began talks with Unite this afternoon at the headquarters of the Advisory, Conciliation and Arbitration Service, Britain’s state-funded mediator, after firefighters, engineers and security staff granted the union a strike mandate in a vote last week.

“I just hope the company sees a bit of sense,” Woodley, Unite’s joint general secretary, said in a telephone interview. “They can afford it. They just have to make a new offer. You’ve got to be hopeful.”

Unite says BAA employees are due a wage increase after last year agreeing to accept a pay freeze as demand for air travel plummeted during the recession. Flights at Heathrow, Europe’s busiest airport, have already been grounded on 22 days this year during strikes by British Airways Plc cabin crew.

Unite on Aug. 12 attacked as “confrontational” BAA’s offer of a 1 percent pay increase, plus a further 0.5 percent conditional on changes to sick leave. Under U.K. labor law, the union has until Sept. 9 to call a strike after 75 percent of participants in a three-week poll backed a walkout.

Stronger Case

Workers at BAA have a stronger case for a pay increase than cabin crew at British Airways as many of them earn less than the U.K. national average wage, said Howard Wheeldon, a senior strategist at BGC Partners in London.

“BAA management does not have much of a leg to stand on and if it wants to win the hearts and minds of airlines and public alike it will have to give some ground,” Wheeldon said. “Talks between the two parties cannot be allowed to fail.”

BAA’s first-half loss for Heathrow and London Stansted airports narrowed to 260.2 million pounds ($406 million) as lower pension costs and retail-sales growth helped offset a 4.5 percent decline in passenger numbers.

Traffic picked up in July, rising 0.3 percent from a year earlier as Heathrow recorded its busiest-ever month.

“The company has a major role to play in the resolution of this dispute,” Brian Boyd, Unite’s national aviation officer, told reporters during a break in the talks, adding that a “great effort is being made to deliver progress.”

Ferrovial acquired BAA for 10 billion pounds in 2006. The Madrid-based company’s stock was trading up 2.8 percent at 6.33 euros as of 3:11 p.m. local time.

To contact the reporters on this story: Steven Rothwell in London at srothwell@bloomberg.net; Chris Spillane in London at cspillane3@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net; Colin Keatinge at ckeatinge@bloomberg.net

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